Diehl pledges his volunteers to help with sales tax cut push

Tuesday

Sep 12, 2017 at 1:42 PMSep 12, 2017 at 1:51 PM

Matt Murphy/ State House news Service

BOSTON – Republican Senate candidate Geoff Diehl on Tuesday tied his campaign to a potential ballot initiative to lower the state's sales tax to 5 percent, offering up his own volunteers to help gather signatures to make sure the question reaches the 2018 ballot.

Diehl, a state representative from Whitman who spearheaded a successful ballot drive in 2014 to repeal a law linking the gas tax to inflation, said his goal is to help gather at least 10 percent of the required signatures for a ballot question to lower the sales tax to 5 percent from 6.25 percent and enshrine in law an annual summer sales tax holiday. Diehl's campaign pledged to help gather 10,000 raw signatures.

"We want to make sure this makes the ballot and has a chance for success," Diehl said at a press conference outside the State House Tuesday morning.

Diehl is one of four candidates running for the Republican nomination to challenge U.S. Sen. Elizabeth Warren for re-election in 2018.

The idea of lowering the sales tax is not popular among Democratic leaders on Beacon Hill at a time when volatile state tax revenues have contributed to successive budget crises, forcing round after round of mid-year budget cuts in recent years.

Even Gov. Charlie Baker, who in 2010 supported a rollback of the sales tax to 5 percent, has been circumspect in comments on the ballot initiative proposals, unwilling as of now to lend his support for the tax cut as he prepares to seek re-election in 2018.

The last time the sales tax was adjusted was in 2009 when House Speaker Robert DeLeo helped lead the push to raise the sales tax from 5 percent to 6.25 percent to generate close to $1 billion in new revenue to address budget shortfalls.

The Retailers Association of Massachusetts filed four versions of ballot questions regarding the sales tax that were all certified last week by the attorney general.

The group has not yet chosen which question it might pursue, but the different questions propose to lower the sales tax to either 5 percent or 4.5 percent with an option to couple either reduction with a permanent sales tax holiday.

RAM President Jon Hurst told the News Service Tuesday that he expects his organization, with input from small business owners, to make a decision "inside of a week" on whether to proceed, and characterized the expense of mounting a statewide campaign as a significant factor in that decision.

"We can't afford to do this kind of public policy campaign unless it's absolutely a crisis situation so money is an issue for signature gathering and campaigning and our mom and pops want this desperately, but it will take a whole lot of 100-dollar checks to run an effective campaign," Hurst said.

Hurst also said the organization has narrowed its options to two questions if it decides to move forward: a 5 percent sales tax with an annual weekend tax holiday, or a 4.5 percent sales tax with an annual weekend tax holiday.

Diehl had not spoken to the Retailers Association prior to his press conference, but called Hurst shortly after making his announcement.

"It was a surprise, but certainly a pleasant surprise. We welcome whatever support we can get from elected officials and any organization concerned about maintaining Main Street," Hurst said. "We have two decisions to make and one is do we go forward at all. That's a monetary decision and maybe this helps a little in that decision-making."

Diehl said he would revisit the issue if RAM decided to push for the steeper reduction in the sales tax.

"We'll revisit that at that time but I think that the 5 percent is the most reasonable plan that they've got out there," Diehl said.

Hurst said a good portion of his membership supports the 4.5 percent tax option, and would support a complete repeal of the sales tax if that were considered a viable option. In 2010 a ballot question that would have lowered the sales tax to 3 percent failed 57 percent to 43 percent.

"It does show you have to be relatively reasonable on the amount," Hurst said.

The state last fiscal year collected $6.21 billion in sales taxes on nearly $100 million in sales, meaning that if a 5 percent tax were applied to the same volume of sales the state would collect about $1.24 billion less in tax revenue.

Diehl said he was unaware of how much money might be at stake for state finances, but noted that the decision by Democratic leadership of the Legislature to hand out pay raises at the beginning of year and to schedule votes for this Wednesday to override spending vetoes made by Gov. Charlie Baker proved the situation can't be too dire.

"It doesn't seem like budget cuts are needed when the Legislature has already given themselves an extremely generous pay package at the beginning of this session," Diehl said.

He also argued that cutting the tax rate could be an economic stimulus for small businesses and generate additional tax revenue by increasing local sales that might otherwise go out of state or to the internet.